GENERAL SURGICAL INNOVATIONS, INC.
NOTICE OF NONSTATUTORY STOCK OPTION GRANT
Optionee's Name and Address:
Gregory D. Casciaro
General Surgical Innovations, Inc.
10460 Bubb Road
Cupertino, CA 95014
You have been granted an option to purchase Common Stock of General
Surgical Innovations, Inc. (the "Company"), as follows:
Board Approval Date: April 6, 1998
Date of Grant (Later of Board
Approval Date or
Commencement of
Employment/Consulting): April 6, 1998
Exercise Price Per Share: $4.00
Total Number of Shares Granted: 25,000
Total Price of Shares Granted: $100,000
Term/Expiration Date: April 6, 2008
Vesting Commencement Date: October 6, 2001
Vesting Schedule: 4,166 of the shares subject
to the option shall become
exercisable each month
beginning on October 6,
2001 with all options
vested as of April 6, 2002.
Termination Period: Option may be exercised for
a period of 30 days after
termination of employment
or consulting relationship
with the Company except as
set out in Sections 7 and 8
of the Nonstatutory Stock
Option Agreement (but in
no event later than the
Expiration Date).
By your signature and the signature of the Company's representative below, you
and the Company agree that this option is granted under and governed by the
terms and conditions of the Nonstatutory Stock Option Agreement attached and
made a part of this document.
GREGORY D. CASCIARO GENERAL SURGICAL INNOVATIONS,
INC.
By:
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Signature
Title:
- ------------------------- ---------------------------
Print Name
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GENERAL SURGICAL INNOVATIONS, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
1. GRANT OF OPTION. General Surgical Innovations, Inc., a
California corporation (the "COMPANY"), hereby grants to the Optionee named
in the Notice of Stock Option Grant attached to this Agreement ("OPTIONEE"),
an option (the "OPTION") to purchase the total number of shares of Common
Stock (the "SHARES") set forth in the Notice of Stock Option Grant, at the
exercise price per share set forth in the Notice of Stock Option Grant (the
"EXERCISE PRICE") subject to the terms, definitions and provisions of this
Nonstatutory Stock Option Agreement (the "Agreement").
This Option is intended to be a Nonstatutory Stock Option.
2. EXERCISE OF OPTION. This Option shall be exercisable during its
term in accordance with the Vesting Schedule set out in the Notice of Stock
Option Grant as follows:
(a) RIGHT TO EXERCISE.
(i) This Option may not be exercised for a fraction of a
share.
(ii) In the event of Optionee's death, disability or
other termination of employment, the exercisability of the Option is governed by
Sections 6, 7 and 8 below, subject to the limitations contained in paragraph
(iii) below.
(iii) In no event may this Option be exercised after the
date of expiration of the term of this Option as set forth in the Notice of
Stock Option Grant.
(b) METHOD OF EXERCISE.
(i) This Option shall be exercisable by delivering to
the Company a written notice of exercise (in the form attached as EXHIBIT A)
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised, and such other representations
and agreements as to the holder's investment intent with respect to such Shares
of Common Stock as may be required by the Company. Such written notice shall be
signed by Optionee and shall be delivered in person or by certified mail to the
Secretary of the Company. The written notice shall be accompanied by payment of
the Exercise Price. This Option shall be deemed to be exercised upon receipt by
the Company of such written notice accompanied by the Exercise Price.
(ii) As a condition to the exercise of this Option,
Optionee agrees to make adequate provision for federal, state or other tax
withholding obligations, if any, which arise upon the exercise of the Option or
disposition of Shares, whether by withholding, direct payment to the Company, or
otherwise.
(iii) No Shares will be issued pursuant to the exercise of
an Option unless such issuance and such exercise shall comply with all relevant
provisions of law and the requirements of any stock exchange upon which the
Shares may then be listed. Assuming such compliance, for income tax purposes
the Shares shall be considered transferred to Optionee on the date on which the
Option is exercised with respect to such Shares.
3. OPTIONEE'S REPRESENTATIONS. In the event the Shares purchasable
pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), at the time this
Option is exercised, Optionee shall, if required by the Company, concurrently
with the exercise of all or any portion of this Option, deliver to the Company
an investment representation statement in customary form, a copy of which is
available for Optionee's review from the Company upon request.
4. METHOD OF PAYMENT. Payment of the Exercise Price shall be by any
of the following, or a combination of the following, at the election of
Optionee: (a) cash; (b) check; (c) surrender of other Shares of Common Stock of
the Company that (i) either have been owned by Optionee for more than six (6)
months on the date of surrender or were not acquired, directly or indirectly,
from the Company, and (ii) have a Fair Market Value on the date of surrender
equal to the aggregate exercise price of the Shares as to which said Option
shall be exercised; (d) authorization from the Company to retain from the total
number of Shares as to which the Option is exercised that number of Shares
having a Fair Market value on the date of exercise equal to the exercise price
for the total number of Shares as to which the Option is exercised; or (e) if
there is a public market for the Shares and they are registered under the
Securities Act, delivery of a properly executed exercise notice together with
irrevocable instructions to a broker to deliver promptly to the Company the
amount of sale or loan proceeds required to pay the exercise price.
5. RESTRICTIONS ON EXERCISE. This Option may not be exercised if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations ("REGULATION G") as
promulgated by the Federal Reserve Board. As a condition to the exercise
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of this Option, the Company may require Optionee to make any representation
and warranty to the Company as may be required by any applicable law or
regulation.
6. TERMINATION OF RELATIONSHIP. In the event of termination of
Optionee's employment or consulting relationship with the Company, Optionee may,
to the extent otherwise so entitled at the date of such termination (the
"TERMINATION DATE"), exercise this Option during the Termination Period set out
in the Notice of Stock Option Grant. To the extent that Optionee was not
entitled to exercise this Option at the date of such termination, or if Optionee
does not exercise this Option within the time specified in the Notice of Stock
Option Grant, the Option shall terminate. The Optionee's employment or
consulting relationship shall not be considered terminated in the case of sick
leave, military leave, or any other leave of absence approved by the Company's
Board of Directors; provided, however, either that such leave must be for a
period of not more than ninety (90) days or that re-employment upon the
expiration of such leave must be guaranteed by contract or by statute, or is
provided pursuant to Company policy adopted from time to time. For purposes of
this Agreement, a change in status from an Employee to a Consultant or from a
Consultant to an Employee shall not constitute a termination of relationship.
7. DISABILITY OF OPTIONEE. Notwithstanding the provisions of
Section 6 above, in the event of termination of Optionee's employment or
consulting relationship with the Company as a result of total and permanent
disability (as defined in Section 22(e)(3) of the Internal Revenue Code),
Optionee may, but only within six (6) months from the date of termination of
such relationship (but in no event later than the date of expiration of the term
of this Option as set forth in Section 10 below), exercise the Option to the
extent otherwise so entitled at the date of such termination. To the extent
that Optionee was not entitled to exercise the Option at the date of
termination, or if Optionee does not exercise such Option (to the extent
otherwise so entitled) within the time specified in this Agreement, the Option
shall terminate.
8. DEATH OF OPTIONEE. In the event of the death of Optionee:
(a) during the term of this Option and while an employee or
consultant of the Company and having been an employee or consultant of the
Company since the date of grant of the Option, the Option may be exercised, at
any time within six (6) months following the date of death (but in no event
later than the date of expiration of the term of this Option as set forth in
Section 10 below), by Optionee's estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent of the
right to exercise that would have accrued had Optionee continued living and
remained as a director of the Company three (3) months after the date of death,
subject to the limitation contained in Section 2(i)(d) above in the case of an
Incentive Stock Option; or
(b) within thirty (30) days after the termination of Optionee's
employment or consulting relationship with the Company, the Option may be
exercised, at any time within six (6) months following the date of death (but in
no event later than the date of expiration of the term of this Option as set
forth in Section 10 below), by Optionee's estate or by a person who
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acquired the right to exercise the Option by bequest or inheritance, but only
to the extent of the right to exercise that had accrued at the date of
termination.
9. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred
in any manner otherwise than by will or by the laws of descent or distribution.
The designation of a beneficiary does not constitute a transfer. An Option may
be exercised during the lifetime of Optionee only by Optionee or a transferee
permitted by this section. The terms of this Option shall be binding upon the
executors, administrators, heirs, successors and assigns of Optionee.
10. TERM OF OPTION. This Option may be exercised only within the term
set out in the Notice of Stock Option Grant, and may be exercised during such
term only in accordance with the terms of this Option.
11. NO ADDITIONAL EMPLOYMENT RIGHTS. Optionee understands and agrees
that the vesting of Shares pursuant to the Vesting Schedule is earned only by
continuing as an employee or consultant of the Company at the will of the
Company (not through the act of being hired, being granted this Option or
acquiring Shares under this Agreement). Optionee further acknowledges and
agrees that nothing in this Agreement shall confer upon Optionee any right with
respect to continuation as an employee or consultant of the Company, nor shall
it interfere in any way with his or her right or the Company's right to
terminate his or her employment or consulting relationship at any time, with or
without cause.
12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION CORPORATE TRANSACTIONS.
(a) CHANGES IN CAPITALIZATION. Subject to any required action
by the Shareholders of the Company, the number of shares of Common Stock covered
by the Option and the price per share of Common Stock covered by this
Option, shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of issued shares of
Common Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board of Directors, whose determination in that
respect shall be final, binding, and conclusive. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to this Option.
(b) CORPORATE TRANSACTIONS. In the event of the proposed
dissolution or liquidation of the Company, the Option will terminate immediately
prior to the consummation of such proposed action, unless otherwise provided by
the Board of Directors. The Board of Directors may, in the exercise of its sole
discretion in such instances, declare that this Option shall terminate as of a
date fixed by the Board of Directors and give the Optionee the right to exercise
his Option as to all or any part of the Optioned Stock, including Shares as to
which the Option would not otherwise be exercisable. In the event of a proposed
sale of all or substantially
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all of the assets of the Company, or the merger of the Company with or into
another corporation, the Option shall be assumed or an equivalent option
shall be substituted by such successor corporation or a parent or subsidiary
of such successor corporation, unless the Board of Directors determines, in
lieu of such assumption or substitution, that the Optionee shall have the
right to exercise the Option as to some or all of the Optioned Stock,
including Shares as to which the Option would not otherwise be exercisable.
If the Board of Directors makes an Option exercisable in lieu of assumption
or substitution in the event of a merger or sale of assets, the Board of
Directors shall notify the Optionee that the Option shall be exercisable for
a period of fifteen (15) days from the date of such notice, and the Option
will terminate upon the expiration of such period.
13. TAX CONSEQUENCES. Optionee acknowledges that he or she has read
the brief summary set forth below of certain federal tax consequences of
exercise of this Option and disposition of the Shares under the law in effect as
of the date of grant. OPTIONEE UNDERSTANDS THAT THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE
SHOULD CONSULT HIS OR HER OWN TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES.
(a) EXERCISE OF NONSTATUTORY STOCK OPTION. Optionee may incur
regular federal income tax liability upon the exercise of the Option. Optionee
will be treated as having received compensation income (taxable at ordinary
income tax rates) equal to the excess, if any, of the fair market value of the
Shares on the date of exercise over the Exercise Price. In addition, if
Optionee is an employee of the Company, the Company will be required to withhold
from Optionee's compensation or collect from Optionee and pay to the applicable
taxing authorities an amount equal to a percentage of this compensation income
at the time of exercise.
(b) DISPOSITION OF SHARES. Gain realized on the disposition of
Shares will be treated as long-term or short-term capital gain depending on
whether or not the disposition occurs more than one year after the exercise
date.
14. AMENDMENT OF OPTION. In addition to any changes or adjustments
that may be made pursuant to Section 12 above, the Company's Board of Directors
shall have the authority to make the following determinations with respect to,
and amendments to, the Option without the consent of Optionee: (a) waiver of
any restriction applicable to the Option or the Shares; (b) reduction in the
exercise price of the Option to the Fair Market Value of shares of the Company's
Common Stock as of the date of such reduction in price; (c) extension of the
exercise periods set forth in Section 5, 6 and 7 above; and (d) any other
amendment or adjustment that does not materially and adversely affect Optionee's
rights hereunder.
15. SIGNATURE. This Stock Option Agreement shall be deemed executed
by the Company and Optionee upon execution by such parties of the Notice of
Stock Option Grant attached to this Stock Option Agreement.
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EXHIBIT A
NOTICE OF EXERCISE
To: General Surgical Innovations, Inc.
Attn: Stock Option Administrator
Subject: NOTICE OF INTENTION TO EXERCISE NONSTATUTORY STOCK OPTION
This is official notice that the undersigned ("OPTIONEE") intends to
exercise Optionee's option to purchase __________ shares of General Surgical
Innovations, Inc. Common Stock, under and pursuant to the Nonstatutory Stock
Option Agreement dated ___________, as follows:
Grant Number: ________________________________
Date of Purchase: ________________________________
Number of Shares: ________________________________
Purchase Price: ________________________________
Method of Payment
of Purchase Price: ________________________________
Social Security No.: ________________________________
The shares should be issued as follows:
Name: ___________________________
Address: ____________________________
____________________________
____________________________
Signed: ____________________________
Date: ____________________________